What is the geographic scope of the non-compete agreement for Fly Fitness after termination?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor; or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the
- business of the Franchisor or any Fly Fitness franchisees or Franchisor-affiliated outlets.
- 8.3.2 Upon the expiration or earlier termination of this Agreement or upon a Transfer and continuing for twenty-four (24) months thereafter, Developer shall not, either directly or indirectly, for himself or herself or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Franchised Businesses to be developed hereunder or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; or (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any Competitive Business within ten (10) miles of the Territory or any Fly Fitness; or (iii) seek to employ any person who is at that time employed by Franchisor, or otherwise induce such person to leave his or her employment or (iv) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System or (v) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Fly Fitnessfranchisees.
- 8.4 Reasonableness of Restrictions.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, after the termination or expiration of the agreement, the franchisee is restricted from participating in any Competitive Business within ten (10) miles of the Territory or any Fly Fitness location. This restriction lasts for twenty-four (24) months. A Competitive Business includes owning, partnering, directing, or working for any business that competes with Fly Fitness.
This means that a former Fly Fitness franchisee cannot operate or be involved with a competing fitness studio within a 10-mile radius of their former territory or any other Fly Fitness location for two years after their franchise agreement ends. This restriction aims to protect Fly Fitness's market share and brand recognition by preventing former franchisees from using their knowledge of the Fly Fitness system to benefit a competitor.
The agreement also states that if the geographic scope is deemed unreasonable in any legal proceeding, it will be reduced to an enforceable level. This clause provides some protection to the franchisee, ensuring that the non-compete is not overly restrictive. However, the franchisee should be aware that they will likely still be bound by some form of geographic restriction.
It is important for prospective Fly Fitness franchisees to fully understand the implications of this non-compete clause before signing the franchise agreement. They should consider how this restriction could impact their future career options if they decide to leave the Fly Fitness system. Franchisees may want to seek legal advice to fully understand the enforceability and potential limitations of this clause in their specific jurisdiction.